EUR/USD Price Analysis – July 10, 2023

Daily Price Outlook

The EUR/USD is currently sitting at weekly highs above 1.0950, experiencing a calm start to what promises to be an eventful week. The USD/EUR exchange rate remains stable above 1.0950, close to Friday's eight-day high of 1.0975. The pair is holding onto its gains from the previous week.

The EUR/USD pair saw further recovery from near the 1.0830 level on Friday, following the erratic trading activity triggered by the US labor market report. Weak US payrolls data caused significant losses for the US Dollar, resulting in a substantial increase in the primary currency pair.

Non-farm payrolls for June came in at 209k, below the estimated 225k, indicating a cooling job market. May and April's NFPs were also revised downward, suggesting a slowdown in employment.

June's Average Hourly Earnings, a measure of wage inflation, showed 0.4% growth compared to a forecast of 0.3%, matching May's revised figure of 0.4%. The weaker US jobs data led investors to reconsider their expectations of a more aggressive stance by the Federal Reserve, resulting in the EUR/USD pair moving back towards 1.1000 at the expense of the US Dollar.

Following the anticipated 25 basis point rate hike by the US central bank this month, the market is currently pricing in a nearly 70% probability of a halt to Fed rate hikes in September.

The Euro's potential upside is temporarily constrained due to conflicting remarks made by ECB officials over the weekend. ECB Governing Council member Francois Villeroy de Galhau stated that Eurozone rates will soon reach their peak but it will be more of a low than a high.

On the other hand, ECB Governing Council member Mario Centeno expressed his anticipation of inflation in the Eurozone being below 3% by the end of 2023.

EUR/USD Price Chart – Source: Tradingview

EUR/USD - Technical analysis

Last Friday, the EURUSD pair closed above the 1.0940 level, signaling a shift towards an upward trend and paving the way for a bullish wave on the intraday basis. The next target to watch is 1.1075, indicating further upside potential.

With the price moving above the EMA50, the overall bias remains bullish in the upcoming sessions. However, some sideways movement may occur due to stochastic negativity. It's important to wait for positive momentum to confirm the achievement of the expected target.

On the flip side, breaking below 1.0940 would halt the suggested bullish wave and potentially lead to a price decline.

For today's trading, the expected range is between 1.0900 support and 1.1050 resistance.